Kshipra and Manisha are Partners sharing Profit and Loss in their Capital Ratio. You are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date. Trial Balance as on 31st March 2019 Debit Balance Amount (₹) Credit Balance Amount (₹) Sundry Debtors 28,000 Sales 1,20,000 Purchases 55,000 Rent 1,800 Furniture 38,500 Sundry Creditors 38,500 Plant & Machinery 60,000 Purchase Return 1,000 Wages 800 Discount 500 Salaries 3,500 Bills Payable 9,000 Discount 800 Capital A/c: Bills Receivable 14,400 Kshipra 90,000 Carriage Outward 1,000 Manisha 30,000 Postage 500 Current A/c: Sales Return 500 Kshipra 5,000 Cash in Hand 4,000 Manisha 3,000 Cash at Bank 47,000 Insurance 2,000 Opening Stock 17,800 Trade Expenses 1,500 Warehouse Rent 2,500 Advertisement 1,000 Building 20,000 2,98,800 2,98,800 Adjustments: Stock on 31st March 2019 was at ₹37,000. Sales include the sale of machinery of ₹ 2,000, which is sold on 1st April 2018. Depreciation on fixed assets @ 5%. Each Partners is entitled to get Commission at 1% of Gross Profit and Interest on Capital 5% p.a. Outstanding Expenses Wages ₹ 200 & Salaries ₹ 500. Create provision for doubtful debts @ 3% on Sundry Debtors.

In the books of Kshipra and Manisha Dr. Trading and Profit and Loss Account for the year ended on 31st March 2019 Cr. Particulars Amt (₹) Amt (₹) Particulars Amt (₹) Amt (₹) To Opening Stock 17,800 By Sales 1,20,000 To Purchase 55,000 Less: Machinery Sold Less: Purchase Return 1,000 54,000 Wrongly Recorded as Sales 2,000 To Wages 800 Less: Sales Return 500 1,17,500 Add: O/s Wages 200 1,000 By Closing Stock 37,000 To Gross Profit c/d 81,700 1,54,500 1,54,500 To Salaries 3,500 By Gross Profit b/d 81,700 Add: O/s Salaries 500 4,000 By Rent 1,800 To Discount 800 By Discount 500 To Carriage Outward 1,000 To Postage 500 To Insurance 2,000 To Trade Expenses 1,500 To Warehouse Rent 2,500 To Advertisement 1,000 To Provision for Doubtful Debts (New) 840 To Depreciation Furniture 1,925 Plant & Machinery 2,900 Building 1,000 5,825 To Interest on Capital Kshipra 4,500 Manisha 1,500 6,000 To Commission Kshipra 817 Manisha 817 1,634 To Net Profit (Transferred to Capital A/c) Kshipra 42,301 Manisha 14,100 56,401 84,000 84,000 Dr. Partners’ Current Accounts Cr. Particulars Kshipra (₹) Manisha (₹) Particulars Kshipra (₹) Manisha (₹) To Balance c/d 52,618 19,417 By Balance b/d 5,000 3,000 By Profit and Loss A/c (Commission) 817 817 By Profit and Loss A/c (Interest on Capital) 4,500 1,500 By Profit and Loss A/c (Share in Profit) 42,301 14,100 52,618 19,417 52,618 19,417 To Balance b/d 52,618 19,417 Balance Sheet as on 31st March 2019 Liabilities Amount (₹) Amount (₹) Assets Amount (₹) Amount (₹) Capital Accounts: Furniture 38,500 Kshipra 90,000 Less: Depreciation 1,925 36,575 Manisha 30,000 1,20,000 Plant & Machinery 60,000 Current A/cs Less: Sold on 1/4/18 2,000 Kshipra 52,618 58,000 Manisha 19,417 72,035 Less: Depreciation 2,900 55,100 Sundry Creditors 38,500 Building 20,000 Bills Payable 9,000 Less: Depreciation 1,000 19,000 Outstanding expenses Closing Stock 37,000 Wages 200 Sundry Debtors 28,000 Salaries 500 700 Less: Provision for Doubtful Debts 840 27,160 Bills Receivable 14,400 Cash in Hand 4,000 Cash at Bank 47,000 2,40,235 2,40,235 Working Notes: (1) Depreciation on fixed assets means depreciation on Furniture, Plant & Machinery, and Building. (2) Sales include the sale of Machinery of ₹ 2,000 is subtracted from sales and from Plant & Machinery. On balance amount of Plant & Machinery ₹ 58,000, calculate 5% depreciation i.e. 60,000 – 2,000 = ₹ 58,000 × 5% = ₹ 2,900 (3) Here on gross profit calculate 1% commission for partners and record it to Profit and Loss A/c and in Current A/cs. Commission payable to each partner = `1 /100 xx "Gross Profit"` = `1/100 xx 81,700` = ₹ 817

Kshipra and Manisha are Partners sharing Profit and Loss in their Capital Ratio. You are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 - Book Keeping and Accountancy

Question

Kshipra and Manisha are Partners sharing Profit and Loss in their Capital Ratio. You are required to prepare Trading Account and Profit and Loss Account for the year ended 31st March 2019 and Balance Sheet as on that date.

Trial Balance as on 31st March 2019
Debit Balance	Amount (₹)	Credit Balance	Amount (₹)
Sundry Debtors	28,000	Sales	1,20,000
Purchases	55,000	Rent	1,800
Furniture	38,500	Sundry Creditors	38,500
Plant & Machinery	60,000	Purchase Return	1,000
Wages	800	Discount	500
Salaries	3,500	Bills Payable	9,000
Discount	800	Capital A/c:
Bills Receivable	14,400	Kshipra	90,000
Carriage Outward	1,000	Manisha	30,000
Postage	500	Current A/c:
Sales Return	500	Kshipra	5,000
Cash in Hand	4,000	Manisha	3,000
Cash at Bank	47,000
Insurance	2,000
Opening Stock	17,800
Trade Expenses	1,500
Warehouse Rent	2,500
Advertisement	1,000
Building	20,000
	2,98,800		2,98,800

Adjustments:

Stock on 31st March 2019 was at ₹37,000.
Sales include the sale of machinery of ₹ 2,000, which is sold on 1st April 2018.
Depreciation on fixed assets @ 5%.
Each Partners is entitled to get Commission at 1% of Gross Profit and Interest on Capital 5% p.a.
Outstanding Expenses Wages ₹ 200 & Salaries ₹ 500.
Create provision for doubtful debts @ 3% on Sundry Debtors.

Ledger

Solution

In the books of Kshipra and Manisha
Dr.	Trading and Profit and Loss Account for the year ended on 31st March 2019				Cr.
Particulars	Amt (₹)	Amt (₹)	Particulars	Amt (₹)	Amt (₹)
To Opening Stock		17,800	By Sales	1,20,000
To Purchase	55,000		Less: Machinery Sold
Less: Purchase Return	1,000	54,000	Wrongly Recorded as Sales	2,000
To Wages	800		Less: Sales Return	500	1,17,500
Add: O/s Wages	200	1,000	By Closing Stock		37,000
To Gross Profit c/d		81,700
		1,54,500			1,54,500
To Salaries	3,500		By Gross Profit b/d		81,700
Add: O/s Salaries	500	4,000	By Rent		1,800
To Discount		800	By Discount		500
To Carriage Outward		1,000
To Postage		500
To Insurance		2,000
To Trade Expenses		1,500
To Warehouse Rent		2,500
To Advertisement		1,000
To Provision for Doubtful Debts (New)		840
To Depreciation
Furniture	1,925
Plant & Machinery	2,900
Building	1,000	5,825
To Interest on Capital
Kshipra	4,500
Manisha	1,500	6,000
To Commission
Kshipra	817
Manisha	817	1,634
To Net Profit (Transferred to Capital A/c)
Kshipra	42,301
Manisha	14,100	56,401
		84,000			84,000

Dr.	Partners’ Current Accounts				Cr.
Particulars	Kshipra (₹)	Manisha (₹)	Particulars	Kshipra (₹)	Manisha (₹)
To Balance c/d	52,618	19,417	By Balance b/d	5,000	3,000
			By Profit and Loss A/c (Commission)	817	817
			By Profit and Loss A/c (Interest on Capital)	4,500	1,500
			By Profit and Loss A/c (Share in Profit)	42,301	14,100
	52,618	19,417		52,618	19,417
			To Balance b/d	52,618	19,417

Balance Sheet as on 31st March 2019
Liabilities	Amount (₹)	Amount (₹)	Assets	Amount (₹)	Amount (₹)
Capital Accounts:			Furniture	38,500
Kshipra	90,000		Less: Depreciation	1,925	36,575
Manisha	30,000	1,20,000	Plant & Machinery	60,000
Current A/cs			Less: Sold on 1/4/18	2,000
Kshipra	52,618			58,000
Manisha	19,417	72,035	Less: Depreciation	2,900	55,100
Sundry Creditors		38,500	Building	20,000
Bills Payable		9,000	Less: Depreciation	1,000	19,000
Outstanding expenses			Closing Stock		37,000
Wages	200		Sundry Debtors	28,000
Salaries	500	700	Less: Provision for Doubtful Debts	840	27,160
			Bills Receivable		14,400
			Cash in Hand		4,000
			Cash at Bank		47,000
		2,40,235			2,40,235

Working Notes:

(1) Depreciation on fixed assets means depreciation on Furniture, Plant & Machinery, and Building.

(2) Sales include the sale of Machinery of ₹ 2,000 is subtracted from sales and from Plant & Machinery.

On balance amount of Plant & Machinery ₹ 58,000, calculate 5% depreciation i.e. 60,000 – 2,000

= ₹ 58,000 × 5%

= ₹ 2,900

(3) Here on gross profit calculate 1% commission for partners and record it to Profit and Loss A/c and in Current A/cs.

Commission payable to each partner

= `1 /100 xx "Gross Profit"`

= `1/100 xx 81,700`

= ₹ 817

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Partnership Final Accounts

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Chapter 1: Introduction to Partnership and Partnership Final Accounts - Exercise 1.2 (Practical Problems) [Page 61]

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RELATED QUESTIONS

Surekha and Sangita decided to undertake a venture jointly. They agreed to share profits and losses in the ratio of 3 : 2. Surekha supplied from her own stock goods worth Rs. 4,00,000 and paid Rs. 9,900 for freight and Rs. 2,400 for insurance. Sangita purchased goods of Rs. 3,90,000 for the venture and paid Rs 14,000 for selling expenses. Sangita accepted a bill for 3 months of Rs. 1,90,000 drawn by Surekha as an advance. The bill was discounted immediately by Surekha for Rs. 1,84,000 and the amount of discount was charged to Joint Venture Account. Sangita sold all the goods for Rs. 10,00,000. At end of the venture, the accounts were settled. Give journal entries in the books of Surekha.

Sanjay and Sudhir are partners sharing profit and losses in the ratio 3: 2. The Trial Balance of the firm on 31st March, 2010 was follows:

Trial Balance as on 31st March, 2010
Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
Opening stock	20,000	Capital A/c's
Purchases	30,000	Sanjay	40,000
Debtors	12,000	Sudhir	30,000
Wages	5,000	Sales	70,000
Salaries	10,000	Sundry Creditors	21,000
Land and building	30,000	Bills Payable	20,000
Plant and machinery	25,000	Discount	5,000
Furniture	16,000	Outstanding Rent	1,500
Advertisement (for 2 years)	6,000
Bills Receivable	8,000
Insurance	2,000
Drawings:
Sanjay	2,000
Sudhir	3,000
Cash in hand	5,500
Rent	10,000
Power and Fuel	3,000
	1,87,500		1,87,500

Adjustments:

1) Stock on hand on 31st March, 2010 was at Rs. 35,000.

2) Write off Rs. 2,000, for further Bad debts and maintain R.D.D. at 5% on debtors.

3) Depreciate Land and Building at 5% and Machinery at 10%.

4) Outstanding expenses were wages Rs 2,000 and salary Rs 1,000.

5) Credit purchases amounted to Rs 4,000 were not recorded in the books of accounts.

6) Provide interest on Partners Capital at 5% p.a.

From the above Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2010 and Balance Sheet as on that data.

Rohan and Roshan are partners in ‘Shan Traders’ sharing profits and losses in the ratio of 2:1. From the following Trial Balance and adjustments prepare Trading and Profit and Loss Account for the year ended 31st March, 2011 and Balance Sheet as on that date

Trial Balance as on 31st March, 2011
Particulars	Amount (₹)	Particulars	Amount (₹)
Opening stock	32,000	Sales	1,93,500
Purchases	64,000	Sundry Creditors	15,000
Plant and Machinery	30,000	Unpaid Wages	1,500
Furniture	18,500	Return outward	2,500
Carriage	1,500	Capital A/c:
Wages and Salaries	35,000	Rohan	90,000
Bills Receivable	5,000	Roshan	50,000
Sundry Debtors	32,000
Conveyance	4,000
Rent, Rates and Taxes	2,000
Return Inward	3,500
Cash in hand	14,750
Land and Building	83,500
Bad debts	1,750
Patents	25,000
	3,52,500		3,52,500

Adjustments:

Closing stock: Cost price Rs 25,000 and market price Rs 30,000.
An amount of Rs 3,500 spent for repairs to Building is debited to Building account.
Depreciate plant and Machinery and Building at 5% p.a.
Goods of Rs 750 taken by Roshan for this personal use.
Included in wages advances given to workers Rs 3,000.
Provide Rs 1,500 for bad and doubtful debts on Debtors.

Given below is the Trial Balance of M/s Roma and Mona partnership firm. Prepare Trading and Profit and Loss Account for the year ended 31st March, 2012 and Balance Sheet as on that date

Trial Balance as on 31^st March, 2012

Debit Balance	Amount Rs	Credit Balance	Amount Rs
Stock on 1^st April, 2011	52000	Provident fund	50000
Sundry Debtors	84000	Interest on P.F. Investment	2800
Bad debts	3000	Sundry Creditors	84000
Premises	78000	Rent received	9600
Salaries	28000	Reserve for Doubtful Debts	2000
Motor Vehicles	50000	Discount received	3600
Purchases	176000	Sales	320000
Provident Fund Investment	50,000	Capital A/c-
Provident Fund contribution	5500	Roma	50000
Wages	22000	Mona	50000
Rent (for 10 months)	16,000
Office Expenses	5,000
Discount allowed	2,500
	572000		572000

Adjustments:

1) Stock on 31st March, 2012 was valued at Rs 80,000.

2) Goods of Rs 6,000 were sold and despatched on 27th March, 2012, but no entry was made in the books of accounts.

3) Write off Bad debts of Rs 4,000 and provide for R.D.D. at 5% on sundry debtors.

4) Provide reserve for discount on debtors at 2% and on creditors at 3%.

5) Outstanding wages Rs 4,000 and outstanding salaries Rs 3,066.

6) Depreciate Motor Vehicle at 5% p.a.

From the following Trial Balance of M/s Sanjay and Vijay, you are required to prepare Trading and Profit and Loss Account for the year ended 31st March, 2013 and Balance Sheet as on that date after taking into consideration the adjustments given below.

Trial Balance as on 31^st March, 2013

Debit Balance	Amount Rs	Credit Balance	Amount Rs
Salaries and wages	12000	Sales	110000
Postage and Telegram	1,750	Sundry Creditors	72700
Opening Stock	23,500	Bills Payable	40000
Plant and Machinery	70,000	10% Bank loan (Taken on 1st Oct 2012)	60000
Advertisement	5,000	Outstanding Audit fees	5900
Import duty	2,100	Capital A/c-
Bad debts	1000	Sanjay	45000
Purchases	98500	Vijay	45000
Sundry Debtors	45800
Bills Receivable	16700
Carriage outward	1800
Wages and stationery (Note 2)	14000
Printing and stationery	4600
Cash in hand	1850
Leasehold Premises	80000
	378600		378600

Adjustments:
1) Closing stock was valued at Rs 30,000.

2) Postage stamps of Rs 250 and stationery of Rs 400 are unused.

3) Goods of Rs 2,500 distributed as free samples.

4) Leasehold property is to be run for 10 years w.e.f. 1st October, 2012.

5) Depreciate Plant and Machinery at 10% p.a.

6) Mr. Rajan, our customer become insolvent and could not pay his debts of Rs 1,500.

Following is the Balance sheet of Harsha and Versha’s firm on 31st March, 2016. They share profit and losses in the ratio of 3 : 2.

Balance sheet as on 31st March, 2016
Liabilities	Amount (₹)	Assets	Amount (₹)
Capital A/c:		Land & building	2,00,000
Harsha	2,80,000	Furniture	76,000
Varsha	2,80,000	Sundry debtors	3,00,000
Sundry creditors	4,00,000	Stock	1,60,000
		Cash at bank	2,24,000
	9,60,000		9,60,000

They decided to admit Asha on 1st April, 2016, into partnership on the following terms:

Asha should bring Rs. 80,000 as her share of goodwill, which is to be retained in the business.
She should bring Rs. 1,00,000 as her capital for 1/4th share in future profits.
land and building to be valued at Rs. 2,40,000 and furniture be reduced by 10%.
A provision of 5% on debtors to be made for doubtful debts.
The stock is to be taken at a value of Rs. 2,00,000.
The excess of capital of Harsha and Varsha over their due proportion of sharing profits in the firm is to be transferred to their respective loan accounts.

Prepare:

Profit and Loss Adjustment Account, Partner’s Capital Account and new Balance Sheet of the firm.

Ashok and Sangmesh are in partnership sharing profit and losses in the ratio of 2 : 1. From the following trial balance and adjustments given below, you are required to prepare Trading and Profit and Loss Account for the year ended on 31st March 2016 and Balance sheet as on that date:

Trial Balance as on 31st March 2016
Particulars	Debit Amount (₹)	Credit Amount (₹)
Prepaid insurance	3,200
Insurance	8,000
R.D.D.		4,000
Discount	3,200
Postage and telephone	12,800
Debtors and creditors	2,64,000	2,72,000
Salaries	2,24,000
Wages	96,000
Opening stock	1,92,000
Carriage	4,000
Purchased and sales	7,72,800	12,06,400
Return inward/Outward	22,400	36,800
Bank Overdraft		4,83,200
Plant and Machinery	96,000
Land and Building	7,04,000
Partner's Capital accounts:
Ashok		2,08,000
Sangmesh		1,92,000
	24,02,400	24,02,400

Adjustment:

Write off Rs. 8,000 for bad debts and provide R.D.D. @ 5% on debtors.
Goods worth Rs. 16,000 were distributed as free samples.
Closing stock on 31st March 2016 was valued at the cost of Rs. 2,24,000 while its market price was Rs. 2,40,000.
The salaries were outstanding at Rs. 8,000.
Depreciation: Land and Building @ 5% p.a. and Plant and Machinery @ 10 % p.a.

Darshan and Amar were partners sharing profit and losses in the proportion of 2: 1. Their balance sheet is as follows:

Balance sheet as on 31st March 2016

Liabilities	Amt(Rs)	Amt(Rs)	Assets	Amt(Rs)	Amt(Rs)
Capital A/cs:			Building		1,00,000
Darshan	96,000		Furniture		20,000
Amar	64,000	1,60,000	Equipments		10,000
General reserve		18,000	Debtors	63,000
Profit and Loss A/c		6,000	Less: R.D.D	3,000	60,000
Creditors		80,000	Stock		84,000
Pawans loan A/c		26,000	Cash		16,000
		2,90,000			2,90,000

On 1st April, 2016 Ranjit is admitted in the partnership on the following terms.

(1) Ranjit should bring in cash Rs 48,000 as capital for 1/5th share in future profits.
(2) Goodwill was raised in the books of the firm for Rs 18,000
(3) Building is revalued st RS 1,12,000 and tghe value of stock to be reduced by Rs 6,000
(4) Reserve for doubtful debts be maintained at Rs 1,800.
(5) Pawans loand is to be repaid.

Prepare:
(1) Revaluation A/c
(2) Capital A/cs of partners and
(3) Balance sheet of the new firm

Write the word/phrase/term, which can substitute the following sentence.

The account to which all adjustments are made when capital is fixed.

Write the word/phrase/term, which can substitute the following sentence.

Expenses which are paid before they are due.

Write the word/phrase/term, which can substitute the following sentence.

The accounts that are prepared at the end of each accounting year.

Write the word/phrase/term, which can substitute the following sentence.

The account in which selling expenses of the business are recorded.